Monday, July 24, 2006

On the Pricing of Internet Service at Hotels


On my recent trip to Brazil my family and I stayed at a high-end hotel while visiting Rio de Janiero's famed Copacabana beach (see picture). The room was very nice and the hotel provided several amenities free of charge, such as access to a rooftop swimming pool. However, I was a bit peeved that the hotel charged for another amenity that I usually take for granted when staying at a hotel: internet access. The hotel charged roughly $10 per hour of internet access. When I stayed at a Best Western hotel in Bowling Green, internet access was free of charge. What's going on here? Can you use the tools introduced in the monopoly chapter to explain the difference in pricing of internet services between luxury and cut-rate hotels?

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